March 6, 2020
Craig X. Cecilio
The SEC proposed significant changes to the existing rules today. These are exciting adaptations to the original JOBS Act of 2012.
Until the JOBS Act was passed eight years ago, investing in alternative investments was reserved for Venture Capitalists, Hedge Funds, and Accredited Investors. The JumpStart Our Business Startups, or JOBS Act, reduced those limitations.
The everyday investor can now access formerly “off-limit” investments for potential portfolio growth. These regulations have started to shift the balance of power from Wall Street elites to the hands of Americans on Main Street.
Some of the significant changes are:
- Regulation A raised the maximum offering amount from $50 million to $75 million
- Regulation Crowdfunding is now raised from $1.07 million to $5 million
- Not applying any investment limits to Accredited Investors in Crowdfunding offerings
- Non-accredited investors are now allowed to rely on the greater of their annual income or net worth when calculating the limit on how much they can invest
- Special Purpose Vehicle’s are now allowed to invest in Crowdfunding offerings
This is the first time in eight years that these rules have been changed, democratizing investment opportunities for Americans.
We are excited here at DiversyFund, because this will make it easier for companies to access capital and allow larger companies more alternative funding strategies.
How does this affect you? You will now have more opportunities from which to choose. The general public will now be able to access even more wealth building opportunities that were once dominated by the 1% (Venture Capitalists, Hedge Funds, and Accredited Investors.)
It is important to note that these rules are not immediate. They will take effect 60 days after publication in the Federal Register, allowing for public comment in the meantime.
My mission, as always, is to break down the barriers that prevent Americans from investing like the wealthiest 1%. That’s why I co-founded DiversyFund in 2016. Since then, we’ve created a groundbreaking tech platform that allows anyone with at least $500 to invest in a Growth REIT. I encourage you to take advantage of these new opportunities!